Florida’s real estate market is facing unprecedented challenges as climate change intensifies, leading to increased hurricane activity, rising insurance costs, and growing concerns about property values. While some buyers remain undeterred, a noticeable shift in demand and a slowdown in sales suggest a potential re-evaluation of the state’s once-booming housing sector.
Florida’s Real Estate Faces Climate Headwinds
Florida’s residential real estate market, valued at an estimated $180 billion, is showing signs of strain under the increasing pressure of climate change. After years of robust growth, the state is experiencing a notable decline in home sales and an increase in market listing times. This shift is largely attributed to more frequent and intense hurricanes, soaring home insurance premiums, and a growing awareness of flood risks.
Sergio Blandón, a 71-year-old retired import and export agent, exemplifies this trend, having left Florida for Nicaragua due to concerns over high home insurance and mortgages. His decision reflects a broader sentiment among some residents and investors.
Key Market Indicators and Trends
- Declining Sales: RedFin reported a 10.2% drop in Florida homebuying from October 2023 to October 2024. Investor purchases also saw significant declines, with Fort Lauderdale experiencing a 23.8% decrease and Miami a 19.4% decline.
- Increased Listing Times: The average number of days a home is listed on the market rose by over a third, from 44 days in October 2023 to 67 days in October 2024.
- Rising Inventory: The number of unsold homes in Florida reached 153,052 by December 2024, a steady increase since the summer of 2022.
- Insurance Crisis: Homeowners have faced the steepest premium hikes in the U.S., with an annual increase of $2,118 between 2021 and 2024. This has led many to rely on the state-backed insurer of last resort, Citizens Property Insurance Corp.
The Paradox of Property Values
Despite the clear climate risks, some areas have seen property values remain resilient or even increase post-disaster. Mayra Cruz, a University of Miami doctoral student, sold her flood-affected Miami Springs home for nearly $250,000 more than she paid, highlighting a
Sources
- Will climate change dampen demand for Florida residential real estate?, WUFT.
- Climate Change Is Causing The Florida Real Estate Market To Tumble, CleanTechnica.
- Climate Change Is Coming for Florida’s Real Estate. Why Don’t Prices Reflect It?, Pulitzer Center.